Robert Shiller is a smart man who just said a dumb thing.
Shiller, a Nobel-Prize-winning Yale economist, suggested on Wednesday that Goldman Sachs would be a better employer for young people with a "moral purpose" than Google, according to Business Insider.
"When you study finance, you are studying how to make things happen, on a big scale, on a lasting scale. That has to matter more than getting into Google and programming some little gimmick," Shiller reportedly said in a debate at The Economist magazine's Buttonwood Gathering in New York.
The debate was called "Goldman Vs. Google: A career on Wall Street or in Silicon Valley?" Shiller's opponent was Vivek Wadhwa, vice president at Singularity University, a Silicon Valley college-type thing co-founded by Google. Wadhwa seemed dumbfounded that the debate was even necessary.
"Would you rather have your children going and cooking up the financial system, engineering the financial system, and creating more bubbles for us?" Wadhwa reportedly said. "More bubbles like the ones my esteemed friend is famous for? Or would you rather have them saving the world?
"I can’t even believe I’m having this debate with a Nobel Prize winner," he added.
It is a little surprising that Shiller was the one taking the pro-finance side. As Wadhwa hinted, Shiller is celebrated mainly for his work on the study of financial bubbles, particularly the recently exploded housing bubble. These bubbles were created by the very financiers doing what Goldman Sachs CEO Lloyed Blankfein once infamously called "God's work." Shiller apparently has the religion.
Now, it is true, as Shiller suggests, that a small-business loan is probably a better thing for humanity than, say, Snapchat. In a slightly less-inflammatory writeup of the Shiller-Wadhwa debate in the New York Times, Shiller is quoted as saying Goldman vs. Google doesn't have to be an either-or proposition. The future Googles of the world will need financiers to get them started. The two go hand-in-hand.
And despite its self-admonishment to not "be evil," Google is trying to make a ton of money, as is most of the rest of Silicon Valley. They are not, generally, doing charity work. In fact, the bright, hot center of the universe of greedy douchebaggery has steadily been shifting toward Silicon Valley and away from Wall Street for a few years now.
On the other hand, it is ridiculous to dismiss Google's primary business -- a highly effective search algorithm used by the entire planet -- as "some little gimmick." It is plainly more beneficial to humanity than, say, the collateralized debt obligation.
The lines get fuzzier around things like Google Glass and mortgage-backed securities, which are both potentially useful and also potentially destructive.
But when Silicon Valley's creations go horribly wrong, they do not destroy the entire global economy, emptying government coffers and leaving millions unemployed for years. And in its pursuit of profit, Silicon Valley has not yet found a way to screw so many people so royally that it racks up more than $100 billion (and counting) in penalties and fines.
These key differences may be one reason why, as CNBC's John Carney noted on Wednesday, the "best and brightest" of young Americans are increasingly shunning careers on Wall Street. Just 27 percent of Harvard MBA graduates this year took jobs in finance, the lowest since at least 2006, when 42 percent went into finance. Eighteen percent of MBAs went into technology, compared with 7 percent in 2006. Finance still has the edge, but it is narrowing rapidly.
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